1040.000.00 Transfers of Property

1040.020.40 Determining the Penalty Period

IM-86 June 15, 2020; IM-63 March 28, 2019; IM-40 May 11, 2018; IM-36 April 20, 2015; IM-29 May 9, 2014; IM-43 April 18, 2013; IM-65 August 2, 2012; IM-08 February 13, 2009; IM-25 March 13, 2008; IM-07 January 26, 2007; IM-11 January 25, 2006; IM-07 January 31, 2005; IM-07 January 22, 2004; IM-15 January 27, 2003; IM-42 June 23, 1994

For any transfer which falls within a look-back period, determine the penalty period according to the following:

  • Determine the total uncompensated value of the transfer.
  • Divide that amount by the average private pay rate for nursing care at the time of application of nursing facility services. The Average Private Pay Rate changes each year.
  • See MHABD Appendix J for the current Average Private Pay Rate.
  • See Appendix N – Average Private Pay Nursing Home Rates for historical Average Private Pay Rates.

Determine the penalty period including any partial month penalty by dividing the transfer amount by the private pay rate. This figure represents the number of months of ineligibility for vendor or HCB services. There is no limit to the number of months. Once the number of months is established, it cannot be recalculated using an updated average private pay rate if the person reapplies.

Example:  Using April 2019 average:  Walter Anderson applies for vendor assistance April 9, 2019. His look-back date is April 9, 2014. In investigating his application, you find that from the sale of his farm he gave $80,000 to a grandson, Mark, in March 2004. A granddaughter, Beth, received $80,000 in February 2016. Mr. Anderson’s transfers must be treated differently.

The transfer to Mark occurred before the look-back date and therefore does not create ineligibility. Since the transfer to Beth is in the look-back period calculate the penalty period. Divide $80,000 by $6,463.00 to arrive at a figure of 12.38. Mr. Anderson was determined eligible except for the transfer as of May 2019. The full 12-month penalty period runs from May 1, 2019 through April 2020 with a partial month penalty calculated for May 2020.

Step #1:


uncompensated transfer amount



monthly rate



number of months for penalty period




Step #2:


average monthly private pay rate


x 12

twelve month penalty period



partial month penalty amount




Step #3:


uncompensated transfer amount



penalty amount for sixteen full months



partial month penalty amount




Step #4:


partial month penalty amount



daily rate ($6,463 x 12/365)



number of days for partial month penalty

For May 2020, the partial month penalty of 12 days would be added to the 12-month penalty period. This means that the MO HealthNet program would authorize payment of long-term care expenses beginning May 13, 2020.

  • If there is only one transfer involved in the determination, start the penalty period with the month in which the transfer occurred, or the month the participant was determined eligible, except for the transfer, whichever is later. The participant will not be eligible for vendor or HCB benefits during the penalty period. A transfer will not affect a participant’s eligibility for non-vendor benefits.
  • If there is more than one transfer involved in the determination, see Section 1040.020.40.05 Multiple Periods of Ineligibility for handling multiple periods of ineligibility.